The MacNeil/Lehrer NewsHour

MS. WOODRUFF: Good evening. I'm Judy Woodruff in Washington.

MR. MacNeil: And I'm Robert MacNeil in New York. After the News Summary this Monday, we look at the latest turn in the Caterpillar strike that many see as the labor battle of the decade, and Jesse Jackson talks about tomorrow's primaries and the Democratic Presidential race. NEWS SUMMARY

MR. MacNeil: Thousands of United Auto Workers continued their five-month-old strike at Caterpillar Tractor plants in Illinois today despite an ultimatum to stop. The company gave workers an early morning deadline to return to work or risk losing their jobs to permanent non-union replacements. Caterpillar officials estimated that about 400 of the nearly 13,000 strikers crossed the picket line today. We'll have a lot more on the story after the News Summary. Judy.

MS. WOODRUFF: The Supreme Court today put limits on how far the government can go in conducting so-called "sting" operations. By a five to four vote, the Justices threw out the conviction of a Nebraska farmer who was repeatedly mailed child pornography advertisements by federal investigators. When he finally bought an illegal magazine, he was arrested. Today's ruling out there was insufficient evidence that the man was predisposed to ordering the magazine without government coaxing.

MR. MacNeil: Russian President Boris Yeltsin faced a key meeting of Russian lawmakers today. It was the first congress of people's deputies since Russia became an independent nation. As expected, the lawmakers were quick to challenge Yeltsin on his reform program. Gaby Rado of Independent Television News reports.

MR. RADO: Congress delegates crossing Red Square on their way to the Kremlin had to run the gauntlet at two rival demonstrations; one pro-Communist calling for Boris Yeltsin's resignation; from the other fiercely loyal to the President, defending his unpopular economic reforms. Inside, the rendition of the national anthem was a reminder that this was an historic occasion, the first sitting of a supreme decision making body of Russia since the demise of the Soviet Union. A bitter showdown has been looming over this congress between Yeltsin's government and a growing number of its critics, who say the Russian people can endure no more economic hardship. The first round went narrowly to Yeltsin's men. A motion to press for a vote of "no confidence" in the government was just defeated. But there was plenty of anger aimed at the leadership. Yegor Gidar, in charge of economic policy, was last week removed from the firing line in a jobs reshuffle. But Yeltsin paid the price of that today when Congress insisted that he, the President, should present the economic report instead of Mr. Gidar. Yeltsin hastily had to postpone a speech planned for today, his gambit having failed. Inside the congress, groups of deputies have been forming themselves into factions, trying to organize opposition to Boris Yeltsin's government. But there's no real party system in Russia yet and no real alternative to Boris Yeltsin. His opponents will simply use the congress to wage a minor war of attrition against the radicals and their economic shock therapy.

MR. MacNeil: The European Community today granted diplomatic recognition to the breakaway Yugoslav Republic of Bosnia- Hercegovina. It came three months after the EC recognized Croatia and Slovenia as independent states. Inside Bosnia, there was more unrest as snipers fired on a peace rally in the capital, Sereyevo. Five demonstrators were reported killed. Police said they arrested six gunmen. All were Serbs. Bosnia's three main ethnic groups, Serbs, Muslims, and Croats, have clashed repeatedly over the past six days for control of the republic. The fighting has claimed about a hundred lives. The European Community also agreed today to lift its oil embargo against South Africa. The decision was taken to reward the country for progress in dismantling apartheid. The oil embargo was imposed in 1985. It was one of the last remaining sanctions the EC maintained against South Africa.

MS. WOODRUFF: Italy's ruling party was dealt a major blow in parliamentary elections today. Projections showed a record low vote for the Christian Democrats. Voters apparently blamed the party's ruling coalition for a weak economy and a high rate of crime. The outcome could end three decades of center left governments dominated by the Christian Democrats. In Germany, a pair of far right parties made surprising gains in two state elections. Many Germans were apparently voting against mainstream parties to protest immigration from Eastern Europe and the high cost of German unification.

MR. MacNeil: Opposition leaders in Peru used words like "dictatorship" and "coup de ta" today to describe the suspension of the constitution by President Alberto Fujimori. Last night he dissolved congress, imposed censorship on the press, and arrested opposition leaders. The action was quickly endorsed by the military. We have a report narrated by Vera Frankel of Worldwide Television News.

MS. FRANKEL: In the first hours after the coup, Lima's streets were ominously quiet. Armored vehicles surrounded the congressional building and Supreme Court, and troops isolated the offices of news organizations. Congressional leaders were placed under house arrest, but that didn't stop one from talking to reporters. Roberto Ramirez Del Viaz denounced the president's actions as a coup de ta. President Fujimori announced the move live on television. He said he was dissolving congress and suspending the constitution and claimed the support of the military. Fujimori was elected in 1990, but has been beset by recession and escalating attacks by the far left Shining Path guerrilla group. He justified his actions by saying legislators have blocked his plans for reform and accused them of corruption. Fujimori's critics say his unpopular economic reforms are simply aiding the Shining Path in its recruitment efforts.

MR. MacNeil: In a White House statement, President Bush expressed his disappointment with President Fujimori's actions. He called it "a regrettable step backwards for the cause of democracy in the hemisphere." At the State Department, Spokesman Richard Boucher had this to say.

RICHARD BOUCHER, State Department Spokesman: While we recognize that President Fujimori inherited severe problems, we believe that these problems do not justify, nor can they be resolved through unconstitutional means. The United States calls for the full and immediate restoration of constitutional democracy which must include immediate freedom for those detained and full respect for human rights, immediate restoration of a free and independent press and civil liberties, and immediate restoration of independent legislative and judicial branches of government.

MS. WOODRUFF: Iran said today that Western governments and Iranian rebels were behind yesterday's attacks on its missions and embassies worldwide. The attacks occurred after Iranian warplanes bombed a base inside Iraq used by Iranian rebels. The camp was just 40 miles from Baghdad. It was Iran's first air strike on Iraq since a 1988 cease-fire in the war between the two countries. Iraqi newspapers claim the raid was a violation of the U.N. cease-fire and warned Iran to "avoid playing with fire." Two Israeli soldiers were killed and six wounded today in South Lebanon. Their convoy was reportedly ambushed by pro-Iranian Palestinians. Three of the Palestinians were killed in the ensuing fire fight. The group that claimed responsibility for the attack said it was to avenged Israel's killing of the head of the pro-Iranian Hezbollah movement.

MR. MacNeil: Isaac Asimov died today in New York City of heart and kidney failure. He was 72 years old. Asimov was one of the country's most prolific science fiction and science fact writers. He began his writing career as a teenager and produced nearly 500 books, publishing 10 or more a year. He lived to see several of his science fiction predictions become reality, including assembly line robotics and pocket computers. And Sam Walton died yesterday after a long struggle with cancer. He was 74. He founded the Wal-Mart discount store chain, beginning 30 years ago with one star in Rogers, Arkansas. The chain grew to more than 1700 stores in 42 states, making Walton one of the richest men in America.

MS. WOODRUFF: That's it for the News Summary. Now it's on to the end of the strike at Caterpillar and a primary eve interview with Jesse Jackson. FOCUS - CATERPILLAR - STRIKING OUT

MR. MacNeil: First tonight, the stand-off at Caterpillar, where the company today urged 13,000 workers to break their five-month- old strike and accept a final contract offer. The union said no. We'll hear from the president of Caterpillar, an official of the United Auto Workers Union and two observers. First: How people in Peoria are coping with the dilemma of whether to work or to strike in this backgrounder by Correspondent Tom Bearden.

MR. BEARDEN: Jimmy Toothman said good-bye to his wife, Joyce, this morning well before sunrise. He went to the same gate at the Caterpillar factory where he's been reporting to work for the past 23 years, this time to join hundreds of other United Auto Workers in what he believes could be a pivotal day in the history of his union. Almost 13,000 UAW members have been off the job since November 3rd. Caterpillar is the world's largest manufacturer of earth moving equipment. The auto workers were demanding that management accept a contract patterned after an earlier agreement with a competitor, the John Deere Company. That contract includes a 3 percent first year raise, 3 percent lump sum payments for each of the next two years, and subsequent cost of living increases. Such pattern bargaining has long been a common industry practice. But this time, Caterpillar refused. The company insisted it needs a more competitive wage scale to compete in the global market. Company officials say their offer amounts to a 13 percent raise over the next three years. The union said that wasn't good enough and voted to walk out. Last week, Caterpillar moved to break the impasse and impose its last contract offer. The company invited all striking employees to return to work starting at 7:30 this morning. Toothman and fellow union members turned out in force, hoping to discourage anybody from doing that. There is a lot of anger on the picket line.

UAW MEMBER: It'll make a man stand out here and try and decide whether to back his union or try and support his family.

2ND UAW MEMBER: That's one of the worst things they've done.

UAW MEMBER: It is.

2ND UAW MEMBER: Keeping pressure on --

UAW MEMBER: It is. They sat there last night and told me how much they care about me, but then they're going to make me come out here and try and make me cross the picket line and ruin my good name. I'm really upset with the company. I never thought they would do this to me. I give 'em 24 years of my life and they're going to throw me away.

MR. BEARDEN: It's been five months since Toothman last received a paycheck. It falls to Mrs. Toothman to try to stretch the $100 a week strike benefits to feed themselves and their four children.

JIMMY TOOTHMAN: It's been real tough. It's -- we try not to let it bother us but it, it bothers my wife more than it does me, because mainly she's the one that's got to decide how to pay the bills. And we have to decide on what groceries to buy. We really have to share the money out, you know, budget it out right.

JOYCE TOOTHMAN: I'm just discouraged that it came down to this, to where men have to make -- or people have to make life decisions that I don't think they should be making, that they should have to make. I don't think it's right [crying].

MR. BEARDEN: Do you blame anybody?

JOYCE TOOTHMAN: I blame both sides for being stubborn.

MR. BEARDEN: No matter how tough it's been to make ends meet, Jimmy believes it's important that union members not break ranks.

JIMMY TOOTHMAN: What happens here in the next few weeks, whether or not this will actually break the union, or whether the union stands solid together and we maintain our stand on the bargaining that we're doing, if Caterpillar breaks us right here, I think you'll see it happen nationwide, that I believe the Big Three automakers are really concerned because their contract will come up right after ours.

MR. BEARDEN: But Joyce believes the union is using its Peoria workers as pawns in a bigger game.

JOYCE TOOTHMAN: These guys have been the ones that have been selected to be sacrificed for the -- for Detroit. And I don't think that's fair. I think that they should be concerned about Peoria and the Peoria workers.

RADIO TALK SHOW HOST: This is Stereo 1470 WNBD at 6 minutes after 8 o'clock. Good Sunday evening everyone and welcome to a special night of programming exclusively on WNBD Radio regarding Caterpillar and the United Auto Workers Union.

MR. BEARDEN: What happens at Caterpillar is clearly on the minds of everyone in the region. Radio talk shows are inundated with calls.

CALLER: People cross the line. It isn't because they like the contract -- the contract offer that the company has sent out to us stinks -- but it might be that they're under such pressure because of their jobs that they go ahead and cross.

RADIO TALK SHOW HOST: I think you make a good point too in that if we try and interpret what happens this week with workers going across the line, maybe it won't say anything about we're a union or a non-union town. Maybe it'll say we're a hungry town. Five months is a long time to live on a hundred dollars or less a week. Thanks for your phone call.

MR. BEARDEN: The company says it needs about 85 percent of its pre-strike work force to return to full operation. Caterpillar said strikers who don't return could be replaced. Reports are that only a small percentage of union members have returned to work.

SPOKESMAN: So far, we've had probably about four or five union brothers cross the line. There's only been one from the building I work in, Building SS, and there's been one from HH and a couple from LL, but other than that, there's probably, as I said, been four or five. I think they're saying another one's just going in now and he's from Building LL. So it's been pretty good really. Probably maybe five or six, seven now at the most have crossed the line.

MR. BEARDEN: Caterpillar says its invitation to union members is open-ended, but the company also plans to start running advertisements for job openings in Illinois newspapers later this week.

MR. MacNeil: Now we hear from Caterpillar President Jerry Flaherty. I spoke to him earlier this afternoon from Peoria. Mr. Flaherty, thank you for joining us. It's reported that only 3 percent of the strikers crossed the picket line today. Does that mean that your ultimatum has failed?

MR. FLAHERTY: We had about 400 employees coming in that were in the last time I checked. We still have some employees coming in and I think that it's a start. It's the type of start we kind of expected. It is certainly a start of a process of getting our employees back to work.

MR. MacNeil: When do you start hiring replacement workers if more of your striking union workers don't come back?

MR. FLAHERTY: Well, our first objective will be to get our own people back to work. We'd like to be able to do that. We will be running some ads during this next week and if we were to have to hire replacement workers, that would not take place for about another three to four weeks, because we would go through a rather lengthy interviewing and hiring process if we were to hire permanent replacements.

MR. MacNeil: Does that mean that your striking employees have three or four weeks to decide individually whether to come back or not, or is there a deadline for them?

MR. FLAHERTY: That would be correct. What we would like to do is see all of our employees return to work. But they would have the opportunity to return to work until we were back to a full complement of employees.

MR. MacNeil: As I understand it, you are trying to get Caterpillar out of the pattern bargaining or the pattern settlement precedent. Would you explain why.

MR. FLAHERTY: Well, we've been working for the union for about a year now, a year and a half. We do not feel we're a pattern company. We are much different than the other companies that the UAW has identified as pattern, the auto industry case, Navistar and John Deere. We are a company that manufactures about 75 percent of our product here in the United States, but we sell about 59 percent of our product outside the United States. In other words, we're a company that's chosen to produce in the United States and ship around the world.

MR. MacNeil: What would it do to Caterpillar just to accept the John Deere package that the union wanted you to accept?

MR. FLAHERTY: Well, the John Deere package is a package that may or may not have been designed for John Deere, but it certainly wasn't a package that was put together with the thought of Caterpillar and the Caterpillar employees in mind. And we need a package that's going to be competitive, going to allow us to compete long-term against non-U.S. manufacturers that we're competing with. And so we've worked very hard, very diligently with the union over quite a period of time. We made three contract offers in the last six months. We made our first one and we had to do it by mail. We had it returned to us unopened. The second one took four minutes for the union to reject it, and the third proposal we made in February, February 19th, we identified that as our final proposal. And it's a very fair and equitable proposal in that it does offer six year by name job security. We've also made a commitment not to close any facilities over a six-year period of time. We will have increases in wages, immediate increases in wages as of today. But I think even more important than that, the wage package will increase 13 percent over the three years, so that an average Caterpillar employee will be making over $19 an hour. In addition to that, there's full health care, improvements in the pension benefits for both current and future retirees. All of our offers have been improvements over the previous one and all three are much better than the contract that just expired.

MR. MacNeil: By drawing the line and saying that if they don't come back, you'll hire replacement workers, it's charged that what you're really trying to do is break the union in this case.

MR. FLAHERTY: We are not trying to do anything other than to negotiate a contract that fits for Caterpillar and allows us to get our employees back to work. As I told you once before, we have made three contract proposals during the six-month period of time. The union has only made one that took place back last October. It was on Deere letterhead. And so we've gotten to the point where we are at impasse. We think our employees have suffered enough. We'd like to get back working. We'd like to take care of the customers that we have, and we feel that we did not have any other alternative, other than to implement our contract at this time and offer our employees the chance to come back to work. Hopefully, they'll do so, but if they do not, if not -- I'm sure many of them will -- but if we do not get enough people returning from strike, then we will recall employees that are on layoff, and then we would go to permanent replacements.

MR. MacNeil: We've spoken to one analyst of the business who says that you are shooting yourselves in the foot because the cost of taking this strike and retraining replacement workers, if you have to, will cost more than the union is asking.

MR. FLAHERTY: We don't look at that at all, as shooting ourself in the foot. Caterpillar is a competitive company on a worldwide basis right now. And we have every intention of remaining that way. And so we are looking at this as a long-term type decision that we have to make. It's very similar to some of the investment decisions that we make. We have spent over $1.9 billion on our facilities in the last three or four years, over a billion of that on our facilities right here in Illinois. So we're taking a long-term view. And we feel we need to take these steps, along with others that we've taken, to remain competitive and be able to provide job security, the type of job security that comes about when you are a competitive company, taking care of your customers.

MR. MacNeil: Well, Mr. Flaherty, thank you very much for joining us.

MR. FLAHERTY: You're welcome.

MR. MacNeil: Next, we turn to United Auto Workers' Secretary General Bill Casstevens. He is the UAW's chief negotiator in the Caterpillar strike and he joins us now from public station WTVS in Detroit. Mr. Casstevens, thank you for joining us. Why won't the UAW accept that last Caterpillar offer?

MR. CASSTEVENS: Because it's totally inadequate and does not provide the benefits that the workers need. It's full of take- aways, which Mr. Flaherty doesn't seem to want to talk about. We had seniority provisions that allowed you to bump from facility to facility. And under their proposal now, you can no longer do that. You could be called back to work; you would have no job security whatsoever; and someone could be hired in another facility in Peoria, for an example, after you, have less seniority than you, they don't need you in one facility, and then they lay you off and you can no longer bump the person in the other facility with less seniority. One of the major issues in this strike is they have a number of people laid off out of line of seniority. And we gave up money out of our wages, 10 cents an hour, two contracts ago, for them to provide training to get those people laid off out of line of seniority back into the plant. And they haven't done it, even though we gave up our wage money in order to provide that. The issue is not global competitiveness. Caterpillar has operated very well under -- they've always taken the position they weren't a pattern company for almost four decades now. But they've operated very well under that. They had $600 million assets when we first got our central agreement in 1958. Now they have over $12 billion in assets. Their net worth has gone up over 1100 percent over that period of time. They are the world's market share leader. They even have 80 percent of the market share in Japan on the machines that are made right in Peoria. So the argument about global competitiveness is just a phony argument that is just a code word for bottom line greed. And the Caterpillar workers know that. That's why they couldn't get them to go back to work today.

MR. MacNeil: Well, why should Caterpillar accept an agreement that was made for John Deere? They say it's a different world and they have different competitors from John Deere.

MR. CASSTEVENS: John Deere is one of their major competitors. Caterpillar in their last meeting put a slide presentation on the blackboard that showed the five major competitors worldwide and guess who one of them was -- John Deere. They compete with John Deere in every product line that they make, except off highway trucks. And when I negotiated the agreement in '86 in Caterpillar we set the ag and construction pattern, and their parting words to me when I left the bargaining table was, you make sure you stick this to John Deere.

MR. MacNeil: What do you say to people like the wife of that striker we heard before you, Joyce Toothman, that your union is using the workers and sacrificing the ones at Caterpillar in order to force better terms with the Big Three automakers in Detroit?

MR. CASSTEVENS: I don't think I heard her say that. I thought I heard her say that we're both being stubborn. And I suppose from her point of view, I would probably think that as well, but it makes no difference if there were no auto industry. We have a pattern in the ag and construction industry and no company deserves to get a competitive advantage over their competitor through the wages and benefits of their workers. If they want a competitive advantage, they need to get it through managing smarter. And the analyst who said Caterpillar is shooting themselves in the foot was absolutely right. They are the world market share leader now. They got that way through the quality and productivity of their current work force. They get premium prices for their products and they cannot maintain that with replacement workers. When the quality goes down the drain, their market share leadership position goes down the drain and their premium prices for their products goes down the drain as well.

MR. MacNeil: You heard Mr. Flaherty just say that you rejected their first two offers almost out of hand and that led them to make the third and final offer. What is your side of your negotiating procedures?

MR. CASSTEVENS: That's totally untrue, because Caterpillar had been advertising its position in the papers for well over a year. They started back in February of last year, advertising their bargaining position in the papers. And everybody knew exactly what it was. As a matter of fact, when the workers voted for strike authorization, they knew what Caterpillar's position was at that particular time and they voted 95 percent in favor of a strike. Since that, Caterpillar has only backed off a few of their take- aways and they played the numbers game. We did not do that. I was responsible for the negotiations in '86 and '88. And for the first time in Caterpillar's history, we got two contracts back-to-back without a strike, without a strike.

MR. MacNeil: You just --

MR. CASSTEVENS: But they changed the rules this time. We did not. We went in with what we expected to get. We did not play the numbers game. We could have done that. We could have put a lot of demands on the table we weren't serious about and backed off of three or four others and said we've made four or five proposals. That's exactly what they have done. They have massive take-aways on the table and they've backed off of just a few of them and tried to say now we've made three but also three inadequate proposals and that the workers understand that. And that's why they did not get the folks back to work and a matter of fact, challenged Mr. Flaherty's figures on how many they said went back to work today.

MR. MacNeil: Okay.

MR. CASSTEVENS: That's not the report I got.

MR. MacNeil: But let's look at the next few weeks. You just mentioned my question to Mr. Flaherty about whether Caterpillar was shooting itself in the foot. Is it possible the UAW is doing this? What about the -- I mean, aren't wages of $19 an hour going to look terribly attractive in this current climate to a lot of unemployed people around Michigan?

MR. CASSTEVENS: There's absolutely no question it will look attractive, however --

MR. MacNeil: I mean, the company said that today.

MR. CASSTEVENS: However Caterpillar -- sure, they're trying to prey on the miseries of the unemployed. Mr. Zimmerman said on television last night there's 9 percent unemployment in Illinois. And that's true. So they're trying to prey upon the miseries of the unemployed to get what -- to bull doze their workers back to work, instead of trying to bargain them back to work. And it won't work. They cannot run that plant with replacement workers. They cannot get quality and productivity and they cannot maintain their global market share leadership position which they got with the current work force.

MR. MacNeil: Well, Mr. Casstevens, thank you for joining us. Now we take a look at what's at stake in the strike for labor and management with two attorneys who sit on different sides of the bargaining table. Daniel Yager is an attorney at the law firm McGinnis & Williams, which represents management in employment issues. He's conducted studies for the Employment Policy Foundation, a think tank funded by corporate foundations. Thomas Geoghegan is a labor lawyer and author of the recently published book "Which Side Are You On: Trying to be for Labor When it's Flat on its Back." He joins us tonight from Chicago. Mr. Geoghegan, what's at stake for labor and the country in the Caterpillar situation?

MR. GEOGHEGAN: Well, this strike is the 1992 replay of the series of strikes that took place in the 1980s, where management was tryingto break the union movement, use permanent replacements, break what is left of it. I'd point out that thirty-five/forty years ago in this country a Caterpillar strike like this would have been impossible. A demand by Caterpillar management that it was going to replace workers, it would have been laughable, because you had 35/40 percent of the country in unions.

MR. MacNeil: And why is it possible now?

MR. GEOGHEGAN: It's possible now because Americans have lost the right to organize. Over the years, union busting consultants have very effectively explained to management that they can pick out pro-union workers, fire them, keep companies from organizing. So today, you have the UAW facing a situation in Peoria and elsewhere where there's no one left in the labor movement. In the old days, people wouldn't cross a picket line because either they were in a union or they thought they could rachet their way up to a union. Today, less than 10 percent or so of the private sector work force is in unions. It's because labor doesn't have the legal right in this country to organize.

MR. MacNeil: So what --

MR. GEOGHEGAN: So when a union does go out on strike, it's a very dangerous situation.

MR. MacNeil: So what's at stake if the UAW loses this one?

MR. GEOGHEGAN: Well, what's at stake is really the middle class living standard. Caterpillar -- the UAW is the last bastion in this country of what used to be the middle class living standard. What Caterpillar wants to do is to break what is left of the labor movement. I mean, they've already -- the strike makes no sense economically from Caterpillar's point of view. They have shot themselves in the foot.

MR. MacNeil: You're the one I was quoting to him earlier.

MR. GEOGHEGAN: Yes. If they win this strike, the company will be in chaos for years. This is ideologically driven. Management wants to be absolute. Those companies like Caterpillar that are facing a union still must wonder why us when everyone else has gotten rid of a labor movement.

MR. MacNeil: Well, let me go --

MR. GEOGHEGAN: And what's happening in the country is wages have been flat or falling, our economy is in a mess as a result, the middle class doesn't have the power to go out and bargain higher wages and to buy things, which creates a recession, which creates difficulties for Caterpillar, which leads to strikes like this. It's all part of the fact that the middle class has lost the power in this country that it had thirty-five/forty years ago to bargain for wages, pensions, health insurance, the whole middle class way of life that we used to have here. But it's gone.

MR. MacNeil: Let me go to Mr. Yager. What do you see at issue in this strike?

MR. YAGER: Well, you know, I think every strike has its own unique set of circumstances. I think in this particular strike the issue is really whether or not one particular company can essentially be forced to agree to something that may have -- may be totally irrelevant to its own situation just because the union is looking to make a better deal or another deal with other companies that have entirely different needs. Caterpillar is being asked to accept something that Deere accepted. Well, Deere has a completely different situation. But they aren't just looking to Caterpillar. They're looking to General Motors. They're looking to Ford. They're looking to Chrysler. They want Caterpillar to accept something because they want to be able then to go to those other companies, essentially force them to agree to whatever it is that Caterpillar has accepted. And I think Caterpillar is looking at their own unique needs and they've really offered a very generous package. As I understand it, we're talking $43,000 average annual wages for these employees, six years of layoff protection. That means six years if you're laid off at that point, at any point in that time frame. You received your full salary. I think a lot of workers are out there wondering why anybody would want to reject this.

MR. MacNeil: Well, this -- why not go on with the pattern agreements that the UAW General Secretary just said have been very good for Caterpillar -- you heard the figures that he cited -- by working on bargaining, on patterned bargaining in the past, they've had all the success, and they've won this huge market share -- and increased their net worth by an enormous amount.

MR. YAGER: Well, I think pattern bargaining is really kind of a relic of a previous era, at least in some industries. Twenty years ago, American companies were competing against each other and the notion of pattern bargaining was that you get the same wages in all of those companies. Well, American companies are now having to compete with companies overseas. And we're not just talking about third world companies here. We're talking about Japanese companies where even in the Caterpillar situation, their competitors are still offering something like a third less than what Caterpillar is offering at the table. Now, is Caterpillar moving those jobs overseas, which a lot of companies have been criticized for doing? No. They're keeping those jobs here so they can make those products and ship them overseas. But to do that, they've got to take cognizance of what kinds of costs their overseas competitors are having to live with.

MR. MacNeil: So you don't see this in the -- in the sort of cataclysmic terms for labor in this country that Mr. Geoghegan does?

MR. YAGER: I think it's very unfortunate that the whole strike debate, the debate over replacement, is always cast in terms that if you understand Eastern, for example, you understand the whole debate. Every strike --

MR. MacNeil: You're referring to Eastern Airlines --

MR. YAGER: Eastern Airlines --

MR. MacNeil: -- which also laid off and took a strike and took replacement workers and ultimately went bankrupt.

MR. YAGER: Right. And that is -- that whole situation is just sort of generalized to every single replacement situation. You know, if you look at the history, Mr. Geoghegan suggested nobody did it until the 1980s, that's not true. We did a study where we studied all the reported cases in the law books and found some 250 cases reported. All but 29 of those occurred before 1981. But you know why you never heard about it before, because by and large -- and I think this is still the case -- it was small companies that were doing it, because a small company doesn't have any other options when they're struck frequently. They can't stockpile. They can't bring workers in from other facilities. The notion of being able to hire strike replacements, which is an option that is really very seldom utilized, but it's a notion that exists essentially to keep the parties in check. Management doesn't want to get struck, so they want to try to reach an agreement at the bargaining table. And I think I believe Caterpillar when they say that's true in their case. The union doesn't want to go out on strike because they're afraid if that strike lasts too long and the warehouses start to empty out, management may have to bring in some other employees to take those jobs. Now, what's their solution to that? They work itout at the bargaining table. Does that always happen? No, it doesn't.

MR. MacNeil: Let's go back to Mr. Geoghegan. On the point of competitiveness, where does this country stand compared with its competitors in other countries on power, union power, and for instance, an ability to take a strike and replace union workers with replacement -- permanent replacements?

MR. GEOGHEGAN: Well, we're unique in using permanent replacements. If the President of Komatsu, Caterpillar's rival, went into work and said, we're going to replace our 12,000 workers with scabs, they'd put the man in jail. In Germany, you have 40 percent of the work force in unions negotiating contracts that cover 90 percent. In Germany, our most significant rival, economically, we have, they and Japan, every contract is a pattern contract. Unions are a very fragile thing. If you don't have pattern contracts, you get into a wage competition that simply lowers the whole wage level very quickly and you can see from the case here that as my colleague points out, Caterpillar is claiming that it's facing terrible wage competition. On the other hand, it's raising wages substantially. But these are a small aspect of its total costs. And really, the issue is not the dollar saved; the issue is to get out of the pattern contract in principle, because once Caterpillar can do that, then Caterpillar and Deere can play off the UAW and ratchet wages generally.

MR. MacNeil: Let me go back to Mr. Yager on that. How do you respond to that point, that the chief competitors of this country have heavy unionization and pattern bargaining?

MR. YAGER: Well, the chief competitors of this country have entirely unique labor laws of their own. And I would suggest that the labor situation in Japan is not only dramatically different from ours, but is dramatically different from Germany. Their laws are very different. You can't take one aspect of their law or situation and extrapolate that. For example, in Germany, you can't strike against a company if it causes severe economic injury to that company. Now, I wonder if organized labor would like to have those kinds of restrictions in this country. Now that the labor laws of each country and the reality of the bargaining situations are so interwoven with their culture and their whole economic situation that I don't think you can just point to someone else and say, well, they do it, so we've got to do it too.

MR. MacNeil: We just have a minute, gentlemen. I just want to ask you briefly in the minute that's left, Mr. Geoghegan, who do you think is going to win this one, given the economic climate and the situation there in Peoria and the other plants?

MR. GEOGHEGAN: Well, if I were a stockholder at Caterpillar, I would hope that my company would lose so that my company, Caterpillar, could get its skilled work force back as soon as possible. I was very impressed today by the morale that the union showed. And I think that CEOs in this country and business is beginning to be taken much more -- well, being looked at much more critically now. Look at the way the country mocked and laughed at the auto executives --

MR. MacNeil: I really have to go to Mr. Yager for his prediction. Who do you think is going to win this one?

MR. YAGER: I don't think you can predict that sort of thing. I think that there will be -- I would really hope that the parties would work something out at the bargaining table and all of this could be avoided. And I'm sure that's what both of the parties want and I'm sure that's what Caterpillar wants. And that's what they've been trying to do for the last five months.

MR. MacNeil: Well, gentlemen, thank you both. NEWSMAKER - '92 ELECTION

MS. WOODRUFF: We turn now to the Presidential campaign and tomorrow's primaries in New York, Wisconsin, and Kansas. President Bush is expected to have an easy time trouncing his conservative Republican opponent, Pat Buchanan. But Democrat Bill Clinton has been engaged in an acrimonious, sometimes bitter battle for front- runner status against Jerry Brown. Today both candidates went out of their way in one appearance to lower the decibel level. They accepted an invitation from TV Talk Show Host Phil Donahue to debate each other without a moderator, without an audience, and without any commercial interruption. They went at it for 47 minutes and here's a sample of how it went.

GOV. BILL CLINTON, Democratic Presidential Candidate: One of the things I really admire about your history is your Catholic social tradition. How do we answer the skeptics, the middle class voters that haven't been voting for us, when we say, look, if we had a sense of common purpose, we could tackle the AIDS crisis, we could change the ethics that lead teenage gangs to set seven homeless men on fire in subways in the last few months, we could change the environment in which these kids are shooting each other in school, and what Bush and all these guys are going to say to us in the fall is, you know, that's the problems that people have inside; that's the destruction of internal values. We preach family values. The Democrats are convincing you that government can do something about that and they can't. We think they can. What's our answer? If you were debating Bush and he said that, what would you say, what would I say?

JERRY BROWN, Democratic Presidential Candidate: Well, I'll tell you this, that if you look at countries in Europe where the government plays a much more active role in terms of health care and protecting the rights of workers, they're giving pregnancy leave and family leave, all the other things that make for a decent life, government does play a role. As a result, the crime rate's a lot lower. America has the highest crime rate in the world, not because we're genetically different, but because we have a social system that is like a jungle. It allows the powerful to exploit the weak. And from the time of the Old Testament, we know that there has to be a tempering of the ravages of just pure, raw power. And that's called justice. And justice can't be just an idea that you or I decide when we get up in the morning. It has to be based on a structure of law and those laws can be a minimum wage. It can be an earned income tax credit. It could be making sure that if you are the lower end of the scale, you get scholarships, you get Head Start, you get child care. We're always trying to create, you know, a balancing here so that we all are sharing in a community and certainly we all have a responsibility. If we do something wrong, it is a matter of our conscience, right and wrong. We have to account for that. But if you create a society where everyone in the neighborhood's on welfare, where there are no jobs and all the capital is going somewhere else, you then are complicit in the creation of evil. That's exactly what the system is doing. So it's a balance. Strength individual responsibility by having hope and opportunity in a structure of jobs and schools in participation. And the richest country in the world can certainly do that if we just get the idea right that justice has to be implemented pragmatically and practically in our market economy.

GOV. CLINTON: I am generally in agreement with that. I think that we have to say because we got to unite the middle class, the poor, and up scale income people who believe in change, we've got to say, yes, people do behave irresponsibly. And you have to give them opportunity and demand responsibility. That's this whole welfare reform thing I've been working on for years now. And I also think it's important to say something else. When people are devalued, when they are not, even more than being exploited, they're being ignored in this country. I mean, you and I have seen people. They're not going to vote for you. They're not going to vote for me. They're not going to vote at all, because they have been debased; they've been devalued; they've been almost -- they've been disenfranchised just by not being important. But they're costing this country a fortune. All these people that are watching us that are going to vote tomorrow, they're paying for all these people. They're paying for them to go to jail. They're paying for them to die on the streets. They're paying for them in homeless shelters; they're paying for them in the Harlem hospital.

MS. WOODRUFF: The most recent New York poll of registered Democratic voters done a week ago showed Clinton leading ground by 12 percentage points with 22 percent undecided. But low voter turnout could reek havoc on Clinton's projected margin. And that's exactly what New York Democratic Chairman John Moreno was predicting today, the reason many voters say they are turned off by all the candidates and don't intend to bother voting. With us to explore this and other aspects of the campaign is a man who's been around this track a couple of times himself, the Rev. Jesse Jackson. And he joins us tonight from Charlottesville, Virginia. Rev. Jackson, thanks for being with us.

REV. JACKSON: How do you do?

MS. WOODRUFF: I'm fine. And I guess my first question is, back to this exchange that we just saw earlier today on television nationwide between Clinton and Brown. Do you think that the civility for a few moments in this campaign in any way takes the edge off the extraordinarily bitter, almost hostile kind of campaign that's been run, the ads --

REV. JACKSON: Absolutely.

MS. WOODRUFF: -- the comments and so forth?

REV. JACKSON: This is what has been missing. They have spent too much time attacking and counterattacking each other, not enough time attacking unmet needs and showing their basic sense of civility and humanity and their basic commitment to social justice and racial justice and gender equality. And those are the qualities that distinguish them from the Bush-Quayle or Buchanan-Duke element. They would do far better now in the coming days ahead to address the impact of the crisis at Caterpillar and what it does to families, or the impact of 74,000 GM workers laid off. If they spent more time now on a plan to reindustrialize the country and reduce crime and put forth shared values, they can win, the whole country can win.

MS. WOODRUFF: But you've been -- Rev. Jackson, you were saying that a few weeks ago during the Super Tuesday primaries. They were at one another, as was Paul Tsongas in Florida, they were at one another in Michigan and Illinois, and they've been at it in the New York primary. Why --

REV. JACKSON: And they have lost because of it too. What you have, by and large, you have seen a rather narrowly conceived message, high-tech smart bomb focused group campaigning, and then a lot of swipes at each other. It has generated no hope among the masses of the people. So you've had this rather record low voter turnout. They want higher voter turnout. There must be a broader message and that message must generate hope. And for people who are watching their plants close, a plan to reindustrialize is to hope. For those who've lost their jobs, a plan to recover those jobs is the hope. For those who see their schools closing and under- financed, while GLs are expanding, an alternative to that is the hope. And those two gentlemen have the ability to generate that hope. They can see the advantage for themselves and for the nation in choosing a higher road.

MS. WOODRUFF: But do you think -- I mean, you know this is -- you've been around, as we know -- are we just forever condemned in this country to having this sort of campaigning? This is what the campaign consultants --

REV. JACKSON: You know, last time when I ran, I got 7 million votes and I registered news voters. But that came because we went for the people and where their need base happen to have been. Right now there's a lot of pain in our country. Ten million people are unemployed. Twenty-five million are on food stamps. You almost never hear that. Thirty-five million are in poverty. Forty million have no health insurance.

MS. WOODRUFF: But --

REV. JACKSON: In every city there are more buildings than there are homeless people. If we keep hitting away at those issues which represent the real economic and moral deficit in this administration, you'll have great excitement in the country.

MS. WOODRUFF: But as you know, my point is that the consultants, the people these candidates listen to more than anybody else right now, are saying, if you want to win, you've got to go negative.

REV. JACKSON: Well, there's a reasonable chance on that kind of strategy you might win the campaign but lose the people. And ultimately you win by dealing with the people. In other words, with the tremendous pain in the country, if there's a plan of partnership away from polarization, the candidate can win and the people can win. I suppose my campaign has always been about what are the real needs. The real needs are now we need to reindustrialize our country. To put it this way, the Japanese have a 400 mile per hour train. That could go from New York to California in eight hours. We could make the steel, lay the rail, build the cars. If one running put forth a plan to rebuild America, to connect America, to put America back to work, that's the best of campaigning. That's where the political expediency and the moral imperative comes together and that's the way to win and to deserve to win.

MS. WOODRUFF: How do you react, for example -- Gov. Clinton on Friday in a clear reference to Gov. Brown's statement that he'd like to have you as a running mate, and I know you haven't committed, you said you might be interested, but you haven't committed -- Gov. Clinton said, this is clearly, in so many words, he said, it's pandering to black voters. He said, we shouldn't play politics with the vice presidency.

REV. JACKSON: Jerry Brown continues to say he would like to have me as a running mate. Jerry Brown is Jesuit trained. He's a Yale lawyer, he's very intelligent, and he's identifying with a winner. I won New York City. I won 7 million votes. Gov. Clinton said in a reference he would like to consider Mayor Daley from Chicago. That shows his politics -- or he would like to have Sen. Lieberman to consider -- the fact of the matter is it is a good feeling to be considered by one of these distinguished gentlemen to work with them. But in reality, my focus is not that. It is that at the end of this process the nominee must make a recommendation and the convention must ratify a nominee.

MS. WOODRUFF: But is what -- let me just interrupt you. Is what Gov. Brown doing pandering to black voters, which is what Gov. Clinton is suggesting?

REV. JACKSON: Well, I do not think so. I do not think that when Gov. Clinton said he would consider Mayor Daley, he was pandering to Irish voters. I see sometimes candidates may reach out to women, as it did at the march in Washington on yesterday - - as long as their reaching out is wholesome and free of hostility and hate and trying to build associations with other Democrats, that is in good taste. Where the candidates have lost is not in trying to associate with other Democrats, but in too much attacking and blood letting toward each other.

MS. WOODRUFF: How do you feel when you see, for example, Gov. Brown being apparently hurt among particularly Jewish voters in New York, because they say they just don't think you're the right choice for vice president?

REV. JACKSON: I think that's almost a stereotype of Jewish people. I don't think it's fair. A few days ago when Gov. Clinton was speaking and a group of blacks interrupted him and that was unfair, the press didn't say therefore, the blacks feel a certain way. When Mr. Brown was speaking, a Jewish assemblyman attacked him. Why say the Jewish people? The reality is we've worked with Jewish people to keep building bridges. I work with leaders like Mr. Mesa, for example, as we have fought to try to get some humane treatment for Haitians. We've worked together to stop David Duke in Louisiana, the anti-semitic and racist remarks of Pat Buchanan, this real strain between Bush, Baker, the White House, and Israel. So we've worked real hard. So it seems to me for the press to take an incident of a guy and then paint the entire Jewish community, it's not fair.

MS. WOODRUFF: Do you think that Gov. Clinton -- and this is moving on to something that came up over the weekend -- has given a satisfactory explanation for this latest version of what happened about the Vietnam draft 20 years ago?

REV. JACKSON: I do think he has. There's been so much focus and picking and pecking and picking and pecking in his past that there's almost no space left to deal with the S&L bailout, the thieves and the scandal there, almost no focus on the banking collapse. And what it means when 500 U.S. corporations create no new jobs in 10 years and what it really means to us when U.S. foreign-held assets are $800 billion, receipts are $5 billion, taxes on the 3 billion, economic strip mining, there is so much focus on little bitty stuff about Bill Clinton and leaves almost no time for the real debate on the alternatives to the Reagan-Bush economic catastrophe. And that catastrophe, performers and workers, whether Caterpillar workers, or all the workers, or banking workers, or investment bankers, is real.

MS. WOODRUFF: What do you say to those people who say neither one of these gentlemen, Gov. Clinton or Gov. Brown, could beat George Bush in the fall, that's what the party needs to do is either get Paul Tsongas back in the race, which we are now told he's thinking about doing, or go to a brokered convention.

REV. JACKSON: Well, I say those who balance scars in their body have a struggle or those who bear the cross do first option on the crown -- if that does not work -- there's a process within our party, within the convention, where other choices, in fact, can be made if there's not a -- if there's not a first round victor in the process. I would think that we would do well, however, to make tough choices on those who are running and not focus only on those three choices or two choices, as it may be. Thirty-four Senators are running. The entire Congress is running. There are a lot of reasons to vote, almost no reason not to vote.

MS. WOODRUFF: Do you think voters have a good choice in New York in the Democratic primary right now?

REV. JACKSON: Voters do have two live choices. I mean, when you compare the sense of social justice and racial justice and gender equality and role vision of Brown and Clinton over and against Bush and Quayle, you begin to see this whole thing in perspective. Do the voters feel good about Bush going to Japan asking Japanese for goals, targets, timetables and quotas to bail us out? Do voters feel good about Mr. Bush sending Haitians sending back to Haiti, facing death squads? America does not feel good about that. If in fact you can see this in perspective, they may have a better test in their mouth, really for Brown and Clinton.

MS. WOODRUFF: Do you have a personal preference between the two?

REV. JACKSON: No, I choose not to make such a preference. I've chosen to do what I think is the right thing, increase voter registration, increase voter turnout, and deal with the message gap. In New York alone, there are 950,000 blacks unregistered, 700,000 Hispanics unregistered. If we could just do something as basic as increase registration 25 percent and reduce crime and illiteracy 25 percent, oh what a contribution that would make to making the nation stronger and better.

MS. WOODRUFF: One last question about Ross Perot, the Texas businessman who's talking about getting in. A lot of people think he will get in. He's there in Charlottesville today. Are you meeting with him by any chance, talking with him?

REV. JACKSON: No. I'm down here to give a lecture at the university tonight.

MS. WOODRUFF: What do you think about his candidacy?

REV. JACKSON: Well, it is a candidacy that must be addressed. In part, he is a distinguished Naval Academy graduate; he is an industrialist, a highly successful one of the time and the reindustrialization got to be the general election theme, he has shown his patriotism with rather gallant efforts to bring Americans back home dead or alive who are on foreign soil. He has expressed a commitment to choice for women, for public education for children, so a man -- those credentials and the kind of money he's willing to put is a force to be reckoned with in this process. The Democrats who are running have the opportunity to either expand their messages now and close that gap or someone like Ross Perot could very well step in that gap.

MS. WOODRUFF: Is he somebody you and other Americans could support?

REV. JACKSON: I intend to support the Democratic nominee, but I will be in dialogue with him because I respect him and whoever wants to talk about a plan, a comprehensive 10-year plan, to reindustrialize America, to begin to salvage our children and recover land for family farmers and educate our children, they can get a serious conversation out of Jesse Jackson.

MS. WOODRUFF: Well, Rev. Jackson, we thank you once again for joining us.

REV. JACKSON: Thank you. RECAP

MR. MacNeil: Again, the main stories of this Monday, thousands of striking union workers at Caterpillar Tractor defied a company ultimatum to return to work or risk losing their jobs. The Bush administration strongly criticized Peru's president for dissolving congress, suspending the constitution and arresting political opponents. Good night, Judy.

MS. WOODRUFF: Good night, Robin. That's our NewsHour for tonight. We'll be back tomorrow night with a Gergen & Shields look at three state primaries. I'm Judy Woodruff. Thank you and good night.